In layman's terms, an FHA loan is insured (or backed) by the
Department of Housing and Urban Development (HUD). This government subsidy has
been around since the housing market found itself in a bit of a pickle over 50
years ago. The idea was that the government could provide a little added
insurance to lenders against default, by padding loans with a little extra
insurance that lenders could hold in escrow and agree to make up the difference
in the event of a loss, in favor of the lender. The government felt like this
program would make lenders more willing to lend to a larger variety of buyers,
make home ownership abound and revitalize a weak economy in a single sweep.
Since the inception of this program, FHA loans have been wildly
popular with home buyers thanks to their low down payment ratios and flexible
credit requirements. Moreover, this abundant flexibility is exactly what is
undergoing the biggest change, while other things remain (somewhat) intact. If
your goal is to be an informed homebuyer, you need to familiarize yourself with
1. Minimum FICO Score
While some lenders still advertise FHA loan approvals on credit scores as low
as 580, the truth is that without a 620, an FHA loan will be harder to come
by―a traditional mortgage has even stricter requirements. 2. Down Payment Sources
In years past, FHA minimum down payments were as little as three percent of the
purchase price. In 2010, that minimum requirement went up half a point, and may
continue to get a little larger over the next few years. This will make an FHA
loan look and feel more like a conventional mortgage, while still retaining
more lenient credit requirements in comparison.
What has changed the most is that borrowers need to be able to
show proof of the source of their down payment, and provide proof of having at
least three months' worth of mortgage payments in savings before an FHA
approved lender will look their way.
We understand that for many people, buying or selling a home is probably the largest investment decision that they will make in their lifetime. Halo Group Realty LLC thus became active in selling Real Estate in 2008 and was setup to make this process a simple and painless transaction. Your dedicated agent will guide you every step of the way to make purchasing or selling your home enjoyable and exciting… as it should be!
Today, Halo Group Realty LLC is at the cutting edge of technology in offering assistance to those in need of real estate services, and we have revolutionized the method of delivering education to consumers. Halo is established as the place for consumers to get the knowledge and assistance they deserve in the process of facilitating the Real Estate transaction, positioning you in the best possible situation to get the best price when you either to buy or sell. With leadership, innovation and forward thinking, Halo Group Realty, LLC is poised to make a huge impression in the real estate market while providing clients the keys to home ownership.
Our goal is to help make your dream a reality and take away all of the stress that goes along with purchasing or selling your home. Whether you are purchasing new construction, an existing home, or just an open space for future enjoyment, representation by a Halo agent is a valuable tool in making your dream become a reality.